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UK – Health Secretary orders clampdown on use of agency staff by the NHS

02 June 2015

Health Secretary Jeremy Hunt has ordered a clampdown on the use of agency staff by the UK’s National Health Service (NHS) following reports that agency spend has increased from £1.8 billion to £3.3 billion in three years.

Mr Hunt announced three new rules to limit the use of agency staff:

  • Set a maximum hourly rate for agency doctors and nurses
  • Ban the use of agencies that are not on approved framework agreements
  • Put a cap on total agency staff spending for each NHS trust in financial difficulties
  • Require approval from a regulator, Monitor, or the Trust Development Authority for any consultancy contracts of £50,000

The agency staff cap will first apply to nursing staff but will be extended to other clinical, medical, management, and administrative staff.

Mr Hunt said: “The path to safer, more compassionate care is the same as the path to lower costs. Simon Stevens [Chief Executive of NHS England] said the NHS needed an extra £8 billion by 2020 and the government has invested that. Now the NHS must deliver its side of the bargain for patients by eliminating waste, helped by the controls on spending we’re putting in place.”

“Expensive staffing agencies are quite simply ripping off the NHS. It’s outrageous that taxpayers are being taken for a ride by companies charging up to £3,500 a shift for a doctor. The NHS is bigger than all of these companies, so we’ll use that bargaining power to drive down rates and beat them at their own game,” Mr Hunt added.

Speaking to the BBC, Mr Hunt claimed that staffing agencies have exploited hospital’s need for staff and acted irresponsibly, driving up the unit cost of nurses by as much as 42%. 

According to the government’s NHS Pay Review Body (Report 28) 2014, however, the NHS’ annual wage bill was £45 billion in the year to April 2014. Agency workers, therefore, accounted for approximately 7.3% of the total NHS wage bill.

In the private sector, on average, agency and contract workers account for between 15% and 20% of total pay spend.

Recruitment and Employment Confederation director of policy Tom Hadley told BBC News: "The language and tone from Jeremy Hunt is outrageous. Nobody objects to there being set parameters for pricing of agency staff, but they already exist in the form of NHS framework agreements."

“Agencies are not ‘ripping off’ the NHS. The overwhelming majority of NHS trusts manage their agency spend through framework agreements which cap prices. Rates are negotiated by central government and recruitment agencies must adhere to them. By not acknowledging the existence of these agreements, and that it is trusts who sometimes decide not to operate through them, it almost sounds like Sir Simon is trying to make our members scapegoats for the financial difficulties some parts of the NHS are finding themselves in,” he added.